Australian Government Sues Google over Deceptive AdWords

The ACCC (Australian Competition and Consumer Commission), the Australian Government’s consumer watchdog body, filed suit July 12 against Google Inc., Google Australia and Google Ireland, alleging that sponsored links for car dealerships took users to the Web site of the Trading Post, a popular weekly classifieds newspaper owned by Australia’s largest telecommunications company, Telstra. The car dealerships compete with the Trading Post for business.

The ACCC alleges that Google, by allowing the ads to be placed, engaged in misleading and deceptive conduct in breach of section 52 of the Trade Practices Act. What's more, according to the ACCC, Google failed to adequately distinguish sponsored links from "organic" search results.